The G20 backed a “fundamental” rethink of the rules on taxing multinational corporations on Friday, taking aim at loopholes used by companies such as Apple and Google to avoid billions of dollars in taxes.
The group of leading economies released an action plan drawn up by the Organisation for Economic Co-operation and Development (OECD) that said the existing system didn’t work, especially when it came to taxing companies that trade online.
“It is a major breakthrough and is at the heart of the social contract,” France’s finance minister, Pierre Moscovici, told a news conference on the sidelines of a meeting of finance ministers from the Group of 20 leading nations in Moscow.
“People and companies have to pay the taxes that are due, it’s the only way to operate in a fair and competitive society,” added British finance minister George Osborne.
Large budget deficits and public anger at inter-company structures designed to channel profits into tax havens have prodded governments to act.
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